The relief for consumers when it comes to energy costs should be extended, says economist Veronika Grimm. This could avoid a possible price increase in winter.
Capping prices for electricity, gas and heat should also protect citizens from excessively high energy costs in the coming winter, says Veronika Grimm, member of the Federal Government’s Advisory Council.
Prices for the winter still uncertain
“The gas price brake is an important instrument to protect people from the hardships of the energy crisis,” Grimm told the “Rheinische Post”. Last winter it was still foreseeable that energy prices would fall so quickly again. And for the coming winter it is still unclear whether there will be another increase in gas and electricity prices, she emphasized.
According to Grimm, a key factor for prices in the cold season is whether the countries that still receive Russian energy would be cut off from supplies by Russia as the war in Ukraine develops: “In this case, it could certainly happen again there will be sharp price increases.”
Scheduled until the end of 2023
The energy price brakes should therefore be extended “as an insurance instrument until the end of April 2024, as was suggested by the Gas and Heat Expert Commission.” According to current planning, the price cap will expire at the end of 2023. The federal government had already provided an extension of four months as an option when it was introduced.
The price brake came into force in March. The gas price for private households is capped at twelve cents per kilowatt hour. The price cap applies to 80 percent of a household’s previous year’s consumption. The upper limit of 40 cents per kilowatt hour applies to the price of electricity – also for a so-called basic consumption of 80 percent.
Less uncertainty, more consumption
According to economics, the price brakes also have advantages for the German economy. They would have reduced uncertainty among citizens and thus ensured a stabilization of consumption. In addition, the data currently shows that “the increase in consumer prices for energy will level off in spring 2023. This is likely due to the price brakes.”